Structural Empirical Evaluation of Job Search Monitoring

In this paper we develop a rich model that describes the labor market behavior of both unemployed and employed workers. Our job search models explicitly models endogenous job search effort and accounts for monitoring of job search behavior of unemployed workers. To estimate the model we use data from a randomized experiment conducted in the Netherlands to evaluate the effectiveness of job search monitoring. The data are rich on both short-term and long-term labor market outcomes and contain some measures for job search behavior. Reduced-form estimations shows that the data are in agreement with the predictions of the theoretical model. Job search monitoring slightly reduces the length of unemployment spells, but that it causes unemployed workers to accept jobs of lower quality. Individuals who were exposed to stricter job search monitoring receive on average lower wages and have shorter job durations. We use the structural model estimates to compare the efficiency of job search monitoring to other potential active labor market policies such as providing reemployment bonuses and changes in unemployment benefits. VU University Amsterdam, IFAU-Uppsala, IZA, IFS, CEPR, CREST. VU University Amsterdam, Tinbergen Institute and CEPR. Address: Department of Economics, VU University Amsterdam, De Boelelaan 1105, NL–1081 HV Amsterdam, The Netherlands.